Year 10 Business Sources of Finance

What are the two sources of finance?

• Debt and self-funding

• Debt and equity

• Equity and bank loans

• Equity and investment

What are the types of debt finance?

• Bank loan, credit card, leasing, overdraft, trade credit

• Bank loan, credit card, self-funding, leasing

• Bank loan, credit card, overdraft, private investment

• Bank loan and credit card

What are the types of equity finance?

• Self-funding, private investors, credit card, venture capitalist

• Self-funding, private investors, venture capitalists, crowdfunding

• Private investors, leasing, overdraft

• Self-funding and crowdfunding

Venture capitalist is an example of which type of finance?

• Debt

• Equity

The financial objectives of a business include

• Profitability, liquidity, solvency, growth and efficiency

• Profitability, liquidity, solvency, growth and income

• Liquidity, solvency, growth and income

• Profit and growth

The interest rate on short-term debt is higher than the interest rate on long-term debt

• True

• False

Raising capital through the collective efforts of a large pool of individuals, primarily online via social media or platforms such as Kickstarter is an example of?

• Venture capitalists

• Private investors

• Crowdfunding

• Self-funding

What is an advantage of a bank loan?

• Businesses need meet a range of requirements before being accepted for the loan

• Repayment burden

• Requires a partial funding requirement

• Has lower interest rates compared to credit cards

What is a disadvantage of self-funding?

• You retain full ownership control of the business

• Easiest and quickest source of finance

• Don’t need to pay back interest to lenders

• Could put a strain on your personal and family life

Which financial objective refers to the businesses ability to meet their long-term debt and financial obligations?

• Profitability

• Liquidity

• Solvency

• Growth